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Verizon (VZ) Hits 52-Week High on Favorable Growth Dynamics

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Shares of telecom giant, Verizon Communications Inc. (VZ - Free Report) scaled a new 52-week high of $55.44 in last Friday’s trading session, before closing a tad lower at $54.94. In the past year, the stock has gained 12% against the decline of 0.5% for the industry.



Growth Drivers

Verizon operates America’s most reliable wireless network and the nation’s premier all-fiber network, and delivers integrated solutions to businesses worldwide. The company expects substantial growth in both its Wireless and Wireline businesses in 2018. For full-year 2018, Verizon expects both GAAP revenues and adjusted earnings per share to increase in low single-digit percentage rates driven by expected savings from tax reform and higher cash flow from operations.

The company is looking forward to capitalize on innovative technology solutions being developed in the Internet of Things (IoT) and telematics ecosystem across multiple industries. Also, the company’s focus on online content delivery, mobile video and online advertising should drive growth.

Verizon has been expanding its fiber optics networks to support 4G LTE and upcoming 5G wireless standards as well as wireline connections. The company will likely achieve higher market traction with focus on gaining share in the retail postpaid market, increasing penetration of smartphones and selling more Internet devices.

Importantly, Verizon remains well on track to launch next-generation 5G wireless residential broadband services in multiple U.S. cities in 2018. On Oct 1, 2018, Verizon deployed the commercial 5G network in parts of Sacramento as well as Houston, Indianapolis and Los Angeles. Notably, installations of Verizon 5G Home began for “First on 5G members” in Sacramento. Verizon 5G Home is the next generation of home broadband Internet service that provides superfast Wi-Fi.

Furthermore, Verizon has been selected by SAP SE (SAP - Free Report) to build the latter’s next-generation global network infrastructure. Verizon will integrate SAP’s global network infrastructure for easier and more cost-effective network management. Also, the company has upgraded its Cat M network by adding voice capabilities for IoT solutions. With this, its nationwide Cat M network is able to support a broad base of IoT solutions with enhancements. Also, the company expanded its collaboration with ShotSpotter, Inc. (SSTI - Free Report) . The alliance will see Verizon as a reseller of ShotSpotter Flex — ShotSpotter’s leading gunshot detection solution.

With continued growth impetus and core focus, the Zacks Rank #3 (Hold) stock is anticipated to hit new 52-week milestones in the remainder of 2018.

Stock to Consider

A better-ranked stock in the industry is T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T-Mobile has a long-term earnings growth expectation of 16.3%. It beat earnings estimates in each of the trailing four quarters, the average surprise being 21.7%.  

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